Tracy Village Social & Sports Club Incorporated (Administrators Appointed) ABN (Tracy Village) (the Association)

Transcription

1 Tracy Village Social & Sports Club Incorporated (Administrators Appointed) ABN (Tracy Village) (the Association) Initial Information for Creditors William Harris and I were appointed Voluntary Administrators (Administrators) of Tracy Village on 26 June According to Tracy Village s records, you may be a creditor of the Association. The purpose of this document is to provide you with information about the voluntary administration and your rights as a creditor. The voluntary administration regime is conducted pursuant to the Corporations Act, which generally deals with companies. However, the relevant provisions of the Corporations Act apply to Incorporated Associations in the Northern Territory due to the operation of Section 72 of the Associations Act (NT). What is a voluntary administration? A voluntary administration, or VA, is a process initiated by the Management Committee of an association or a secured creditor of an association when they form the view the association is, or is likely to become, insolvent. Insolvent means that the association is, or is likely to become, unable to pay its debts when they fall due. Less commonly, a VA is commenced by a liquidator of the association. In this case, the VA appointment was made by the Management Committee of the Association. The objective of a voluntary administration is to preserve as much as possible of the business of the association or, if not, seek a better outcome for creditors than a liquidation of the association. The process involves the appointment of a Voluntary Administrator to the association to administer and investigate its business, property, affairs and financial circumstances. A Voluntary Administrator must complete investigations, form an opinion about the association s financial position and its future and issue a detailed report to creditors of the association. Creditors are then given the opportunity to vote on the future of the association. What happens to your debt? All creditors of Tracy Village are now creditors in the voluntary administration and your debt will be dealt with in the voluntary administration. It is important to note that a voluntary administration creates restrictions on creditors being able to enforce their rights. You generally cannot enforce your claim, recover your property, enforce your security, commence an action to place the association into liquidation or act on a personal guarantee. If you have leased property to Tracy Village, have a retention of title claim or have a registered personal property security interest in relation to Tracy Village, please contact Olivia Houston on (07) as soon as possible. Your rights as a creditor We enclose a copy of the information sheet Creditor Rights in Voluntary Administrations issued by the Australian Restructuring Insolvency & Turnaround Association (ARITA). It includes information on your rights to: make reasonable requests for information; give directions to the Administrators; appoint a reviewing liquidator; and replace us as Administrators. Where the attached document refers to company, please read that as a reference to Association. 1

2 Declaration of Independence, Relevant Relationships and Indemnities (DIRRI) We enclose our DIRRI. The DIRRI assists you to understand any relevant relationships that we have, and any indemnities or upfront payments that have been provided to us. We have considered each relationship and it is our opinion that none of the relationships disclosed in the DIRRI result in a conflict of interest or duty, or affect our independence. Meetings of creditors As voluntary administrators, we are required to hold two meetings of creditors. First meetings of creditors The first meeting of creditors will be held as follows: Date: 5 July 2018 Time: 11:00 AM Address: 28 Tambling Terrace, Lyons NT 0810 We enclose a notice of meeting. To participate in this meeting, you must submit a proof of debt and information to substantiate your claim. If the creditor is a person and will attend the meeting, this is all that is required. However, if the creditor is another type of entity (such as a company), they must also appoint a person a proxy or person authorised under a power of attorney to vote on behalf of the creditor at the meeting. A proxy should also be appointed if the creditor is a person, but is not available to attend the meeting. You can appoint the chairperson of the meeting as your proxy and direct the chairperson how you wish your vote to be cast. If you choose to do this, the chairperson must cast your vote as directed. Proof of debt and proxy forms are enclosed, together with guidance notes to assist you when you complete them. To ensure that the meeting is conducted as efficiently as possible, completed proof of debt and, if applicable, proxy forms must be returned to my office by post, fax or by 4 July We also enclose general information for attending and voting at meetings of creditors. Committee of Inspection At the first meeting, creditors will consider whether a Committee of Inspection (COI) should be appointed. The role of a COI is to consult with the voluntary administrators and receive reports on the conduct of the administration. A COI can also approve the voluntary administrators fees. It is our opinion that a COI would be useful to assist with the conduct of the voluntary administration. We enclose a copy of the information sheet Committees of Inspection issued by ARITA. You should consider whether you would like to act as a member of the COI, if one is appointed. However, it is for creditors to decide if they would like to form a COI in this VA. Second meeting of creditors We will also in due course call a second meeting of creditors. Before that meeting you will be sent the notice of meeting and a detailed report which will set out the options for Tracy Village s future. We will also provide our opinion as to what option we think is in the best interests of creditors. At that second meeting, creditors will decide on the future of Tracy Village. You are encouraged to attend these meetings and participate in the voluntary administration process. What happens next? We will proceed with the voluntary administration, which will include: ensuring the continued trading of Tracy Village s business; preparing for and holding the meetings of creditors; investigating Tracy Village s affairs; analysing any Deed of Company Arrangement that is proposed; and 2

3 preparing our report to creditors. As discussed above, you will receive further correspondence from us before the second meeting of creditors. Remuneration We enclose our Initial Remuneration Notice, which provides you with information about how we propose to be paid for undertaking the voluntary administration. We will seek your approval of our remuneration at the second meeting of creditors, unless that remuneration is approved earlier by a COI (if one is appointed). We will provide you with detailed information about what tasks we have undertaken and the costs of those tasks. notification If you wish to receive future correspondence via , please complete and return the enclosed Authorisation Form to ohouston@mcgrathnicol.com. Further information For avoidance of any doubt, where the Insolvency Information sheet references Australian Securities & Investments Commission, please read that reference as Commissioner of Consumer Affairs. ARITA provides information to assist creditors to understand voluntary administrations and insolvency. This information is available from ARITA s website at A copy of the information sheet, Insolvency information for directors, employees, creditors and shareholders, issued by the Australian Securities and Investments Commission (ASIC) is also enclosed for your information. Again, please note that any reference to company should be read as a reference to association. What you should do next You should: read the enclosed information; decide whether you are going to participate in the first meeting; and if so complete and return your proof of debt and proxy form (if required) by 4 July If you have any queries, please contact Olivia Houston on (07) For further information about this engagement, please refer to the website Dated: 27 June 2018 Anthony Connelly Administrator Enclosures: 1 Notification Form 2 ARITA Information Sheet - Creditor Rights in Voluntary Administrations 3 Declaration of Independence, Relevant Relationships and Indemnities 4 Notice of Meeting 5 Proof of Debt (Form 535) 6 Proof of Debt Guidance Notes 7 Proxy Form 8 Proxy Form Guidance Notes 9 General information for attending and voting at meetings of creditors 10 ARITA Information Sheet Committees of Inspection 11 Initial Remuneration Notice 12 ASIC Information Sheet - Insolvency information for directors, employees, creditors and shareholders 3

4 Tracy Village Social & Sports Club Incorporated (Administrators Appointed) ABN (Tracy Village) Authorisation Form I request that notices in relation to Tracy Village be ed to me at the following address: Signed: Dated: D Authorisation Form_OH

5 Creditor Rights in Voluntary Administrations As a creditor, you have rights to request meetings and information or take certain actions: Right to request information Right to give directions to voluntary administrator Right to appoint a reviewing liquidator Right to replace voluntary administrator Right to request information Information is communicated to creditors in a voluntary administration through reports and meetings. In a voluntary administration, two meetings of creditors are automatically held. You should expect to receive reports and notice of these meetings: The first meeting is held within 8 business days of the voluntary administrator s appointment. A notice of meeting and other information for this meeting will be issued to all known creditors. The second, or decision, meeting is usually held within 6 weeks of the appointment, unless an extension is granted. At this meeting, creditors will get to make a decision about the company s future. Prior to this meeting the voluntary administrator will provide creditors with a notice of the meeting and a detailed report to assist in making your decision. Requests must be reasonable. They are not reasonable if: (a) complying with the request would prejudice the interests of one or more creditors or a third party (b) the information requested would be privileged from production in legal proceedings (c) disclosure would found an action for breach of confidence (d) there is not sufficient available property to comply with the request (e) the information has already been provided Important information will be communicated to creditors prior to and during these meetings. Creditors are unable to request additional meetings in a voluntary administration. (f) the information is required to be provided under law within 20 business days of the request Creditors have the right to request information at any time. A voluntary administrator must provide a creditor with the requested information if their request is reasonable, the information is relevant to the voluntary administration, and the provision of the information would not cause the voluntary administrator to breach their duties. A voluntary administrator must provide this information to a creditor within 5 business days of receiving the request, unless a longer period is agreed. If, due to the nature of the information requested, the voluntary administrator requires more time to comply with the request, they can extend the period by notifying the creditor in writing. (g) the request is vexatious If a request is not reasonable due to (d), (e) or (f) above, the voluntary administrator must comply if the creditor meets the cost of complying with the request. Otherwise, a voluntary administrator must inform a creditor if their information request is not reasonable and the reason why. ARITA ACN Level 5, 191 Clarence Street, Sydney NSW 2000 Australia GPO Box 4340, Sydney NSW 2001 t e admin@arita.com.au arita.com.au AUSTRALIAN RESTRUCTURING INSOLVENCY & TURNAROUND ASSOCIATION

6 Right to give directions to voluntary administrator Creditors, by resolution, may give a voluntary administrator directions in relation to a voluntary administration. A voluntary administrator must have regard to these directions, but they are not required to comply with the directions. If a voluntary administrator chooses not to comply with a direction given by a resolution of the creditors, they must document their reasons for not complying. An individual creditor cannot provide a direction to a voluntary administrator. Right to appoint a reviewing liquidator Creditors, by resolution, may appoint a reviewing liquidator to review a voluntary administrator s remuneration or a cost or expense incurred in a voluntary administration. The review is limited to: remuneration approved within the six months prior to the appointment of the reviewing liquidator, and expenses incurred in the 12 months prior to the appointment of the reviewing liquidator. The cost of the reviewing liquidator is paid from the assets of the voluntary administration, in priority to creditor claims. An individual creditor can appoint a reviewing liquidator with the voluntary administrator s consent, however the cost of this reviewing liquidator must be met personally by the creditor making the appointment. Right to replace voluntary administrator At the first meeting, creditors have the right to remove a voluntary administrator and appoint another registered liquidator to act as voluntary administrator. A creditor must ensure that they have a consent from another registered liquidator prior to the first meeting if they wish to seek the removal and replacement of a voluntary administrator. Creditors also have the opportunity to replace a voluntary administrator at the second meeting of creditors: If creditors vote to accept a proposed deed of company arrangement, they can appoint a different registered liquidator as the deed administrator. If creditors vote to place the company into liquidation, they can appoint a different registered liquidator as the liquidator. It is however usual for the voluntary administrator to act as deed administrator or liquidator. It would be expected that additional costs would be incurred by an alternate deed administrator or liquidator to gain the level of knowledge of the voluntary administrator. Like with the first meeting, a creditor must ensure that they have a consent from another registered liquidator prior to the second meeting if they wish to seek to appoint an alternative registered liquidator as deed administrator or liquidator. For more information, go to Version: July (VA) - INFO - CREDITOR RIGHTS INFORMATION SHEET V1_0.DOCX AUSTRALIAN RESTRUCTURING INSOLVENCY & TURNAROUND ASSOCIATION PAGE 2

7 Declaration of Independence, Relevant Relationships and Indemnities (DIRRI) Tracy Village Social & Sports Club Incorporated (Administrators Appointed) ABN (Tracy Village) (the Association) The Corporations Act, the Associations Act (NT) and professional standards require the Practitioner/s appointed to an insolvent entity to make a declaration as to: their independence generally; relationships, including a) the circumstances of the appointment; b) any relationships with the company and others within the previous 24 months; c) any prior professional services for the company within the previous 24 months; d) that there are no other relationships to declare; and any indemnities given, or up-front payments made, to the Practitioner. This declaration is made in respect of ourselves, our partners, the firm McGrathNicol, which for the purpose of this declaration includes the McGrathNicol Partnership, the McGrathNicol Advisory Partnership and McGrathNicol Services Pty Ltd. Independence We, Anthony Norman Connelly and William James Harris, of the firm McGrathNicol have undertaken a proper assessment of the risks to our independence prior to accepting the appointment as administrators of Tracy Village in accordance with the law and applicable professional standards. This assessment identified no real or potential risks to our independence. We are not aware of any reasons that would prevent us from accepting this appointment. Declaration of Relationships Circumstances of appointment McGrathNicol Advisory was engaged by National Australia Bank Limited ( NAB ), the Association s secured lender, to conduct a three-phase Independent Business Review ( IBR ) of Tracy Village, which was undertaken during the period January to June Details of the work we undertook at NAB s request is set out in the table below: Phase Engagement date Date report was issued to NAB Fee amount and date invoiced to NAB (excluding GST and disbursements billed at cost) 1 12 January January June 2018 for $12, February May June 2018 for $28, June June 2018 Invoice has not been issued. Fixed fee is $11,500 DIRRI OH 1

8 The scope of the three-phased engagement was as follows: Phase 1 - to develop a short-term cash flow forecast. Phase 2 - to develop an integrated 12 month forecast to consider Tracy Village s long term viability and the impact of cyclical and seasonal trends. Phase 3 to consider the potential appointment of voluntary administrators to Tracy Village, the potential for a subsequent Deed of Company Arrangement, and to attend Tracy Village and discuss with the Management Committee the available alternatives and answer queries; including in relation to the voluntary administration process. The reports issued to NAB for Phases 1 & 2 were also provided to Tracy Village, with certain sections omitted. Anthony Connelly and a staff member of McGrathNicol met with the Management Committee of the Association on 7 June During this meeting, the matters discussed included the financial position of Tracy Village, the options available if the Management Committee determined that Tracy Village was insolvent or likely to become insolvent, including the potential appointment of voluntary administrators and the voluntary administration process generally. During the period 11 to 22 June 2018 Anthony Connelly held two brief telephone discussions with Garry Ross, the president of the Management Committee to answer further queries regarding the voluntary administration process, including how voluntary administrators are appointed. On 25 June 2018, Anthony Connelly and two staff members of McGrathNicol met with the Management Committee to answer final queries regarding the administration process and timing and, at that meeting, the Management Committee of Tracy Village determined to appoint the administrators, with the appointment to take effect on 26 June In our opinion, the communications held with Tracy Village during the period we were engaged by NAB, the provision of the IBR to NAB and the discussions regarding voluntary administration do not affect our independence as: they were of limited scope with a clear information gathering focus and would not be subject to review and challenge during the course of the administration; an Investigating Accountant engagement (alternative terminology for an IBR) is recognised by the Australian Restructuring, Insolvency and Turnaround Association s (ARITA) Code of Professional Practice as a specific exception to the general prohibition on external administrators having a prior professional relationship with the entity and therefore does not preclude a subsequent appointment as voluntary administrators; given our scope and objectives (to understand Tracy Village s current and forecast financial position) these communications would not influence our ability to be able to fully comply with the statutory and fiduciary obligations associated with the administration in an objective and impartial manner; and it is recognised by the ARITA Code of Professional Practice that pre-appointment discussions regarding insolvency options and obtaining background information are necessary and do not amount to an impediment to accepting an appointment. We have issued invoices to NAB in relation to our Phase 1 and Phase 2 engagements, however, no invoice has yet been issued in relation to our Phase 3 engagement. NAB has made no payment to McGrathNicol, but as the engaging party for these engagements, NAB will be responsible for payment of the invoices. McGrathNicol Advisory agreed to charge a fixed fee for the three phases of work, including the cost of a subcontracted hospitality consultant, HMCS (Aust) Pty Ltd. Tracy Village has made no payment to McGrathNicol and will have no direct responsibility for the final account that is to be issued for this IBR. We have provided no other information or advice to Tracy Village or the Management Committee of the Association prior to our appointment beyond that outlined in this DIRRI. DIRRI OH 2

9 Relevant Relationships (excluding professional services to the Insolvent) Neither we, nor our firm, have, or have had, within the preceding 24 months, any relationships with Tracy Village, an associate of Tracy Village, a former insolvency practitioner appointed to Tracy Village or any person or entity that has security over the whole or substantially the whole of Tracy Village s property. We or a member of our firm, have or have had within the preceding 24 months, a relationship with: Name Nature of relationship Reasons NAB NAB holds security over the whole or substantially the whole of the property of Tracy Village. McGrathNicol undertakes corporate recovery and advisory work from time to time on instructions from NAB. As detailed in section B(i) above McGrathNicol undertook an IBR of Tracy Village on instructions from NAB. We believe this relationship does not result in a conflict of interest or duty because: Each professional engagement undertaken for NAB in relation to a particular entity or group of entities is conducted on an entirely separate basis, which has no bearing on this appointment. These engagements are only commenced after full regard is given to potential conflicts of interest in relation to all interested stakeholders. McGrathNicol has not undertaken an engagement for NAB in respect of Tracy Village (other than that referred to in Part B (i) above). Prior professional services to the Insolvent Given these factors, our independence in acting as voluntary administrators of Tracy Village has not been affected. Neither we, nor our firm, have provided any professional services to Tracy Village in the previous 24 months. No other relevant relationships to disclose There are no other known relevant relationships, including personal, business and professional relationships, from the previous 24 months with Tracy Village, an associate of Tracy Village, a former insolvency practitioner appointed to Tracy Village or any person or entity that has security over the whole or substantially the whole of Tracy Village s property that should be disclosed. Indemnities and Up-front Payments Other than any statutory indemnities that may be available to the Voluntary Administrators, neither we, nor the firm, have been provided with any indemnities or up-front payments with respect to this matter. We will request that NAB provide funding support for the trading operations, certain proposed capital works and the professional costs associated with the voluntary administration following our appointment. Dated: 27 June Anthony Connelly Jamie Harris DIRRI OH 3

10 Notice of Meeting Tracy Village Social & Sports Club Incorporated (Administrators Appointed) ABN (Tracy Village) (the Association) NOTICE OF MEETING OF CREDITORS OF THE ASSOCIATION UNDER EXTERNAL ADMINISTRATION Notice is now given that a meeting of the creditors of Tracy Village will be held at Tracy Village, 28 Tambling Terrace, Lyons NT 0810 on 5 July 2018 at 11:00AM. The purpose of the meeting is to determine: (a) (b) whether to appoint a Committees of Inspection; and if so, who are to be the Committee s members. The effect of Insolvency Practice Rules (Corporations) section (entitlement to vote as creditor at meetings of creditors) and section 72 of Associations Act is: (1) A person other than a creditor (or the creditor s proxy or attorney) is not entitled to vote at a meeting of creditors. (2) Subject to subsections (3), (4) and (5), each creditor is entitled to vote and has one vote. (3) A person is not entitled to vote as a creditor at a meeting of creditors unless: (a) his or her debt or claim has been admitted wholly or in part by the external administrator; or (b) he or she has lodged, with the person presiding at the meeting, or with the person named in the notice convening the meeting as the person who may receive particulars of the debt or claim: (i) (ii) those particulars; or if required a formal proof of the debt or claim. (4) A creditor must not vote in respect of: (a) an unliquidated debt; or (b) a contingent debt; or (c) an unliquidated or a contingent claim; or (d) a debt the value of which is not established; unless a just estimate of its value has been made. Proofs of debt and proxies must be submitted by 4 July 2018 by 5:00pm and may be ed to Olivia Houston at ohouston@mcgrathnicol.com 1

11 Dated: 27 June 2018 Anthony Connelly Administrator McGrathNicol GPO Box 9986 Brisbane QLD 4001 Australia

12 Australian Company Number: FORM 535 Corporations Act (2001) Subregulation (2) FORMAL PROOF OF DEBT OR CLAIM (GENERAL FORM) To the Administrators of Tracy Village Social & Sports Club Incorporated (Administrators Appointed) 1. This is to state that the association was on 26 June 2018 (date of appointment of the voluntary administrators), and still is, justly and truly indebted to: (full name and address of the creditor and, if applicable, the creditor's partners. If prepared by an employee or agent of the creditor, also insert a description of the occupation of the creditor) for $ and cents. Date Consideration (state how the Debt arose) Amount $ c Remarks (include details of voucher substantiating payment 2. To my knowledge or belief the creditor has not, nor has any person by the creditor's order, had or received any satisfaction or security for the sum or any part of it except for the following: (insert particulars of all securities held. If the securities are on the property of the association, assess the value of those securities. If any bills or other negotiable securities are held, show them in a schedule in the following form). Date Drawer Acceptor Amount $c Due Date *3. I am employed by the creditor and authorised in writing by the creditor to make this statement. I know that the debt was incurred for the consideration stated and that the debt, to the best of my knowledge and belief, remains unpaid and unsatisfied. *3. I am the creditor's agent authorised in writing to make this statement in writing. I know that the debt was incurred for the consideration stated and that the debt, to the best of my knowledge and belief, remains unpaid and unsatisfied.... Dated Signature Occupation: Address Proof of Debt Reference: *Do not complete if this proof is made by the creditor personally.

13 Proof of Debt Guidance Notes (Please read carefully before filling in Form 535 or Form 536) It is a creditor s responsibility to prove their claim to our satisfaction. When lodging claims, creditors must ensure: the proof of debt form is properly completed in every particular; and evidence, as set out under Information to support your claim, is attached to the Form 535 or Form 536. Directions for completion of a Proof of Debt Insert the full name and address of the creditor. Under Consideration state how the debt arose, for example goods sold to the company on.. Under Remarks include details of any documents that substantiate the debt (refer to the section Information to support your claim below for further information). Where the space provided for a particular purpose is insufficient to contain all the information required for a particular item, please attach additional information. Information to support your claim Please note that unless you provide evidence to support the existence of the debt, your debt is not likely to be accepted. Detailed below are some examples of debts creditors may claim and a suggested list of documents that should accompany a proof of debt to substantiate the debt. Trade Creditors Invoice(s) and statement(s) showing the amount of the debt; and Advice(s) to pay outstanding invoice(s) (optional). Guarantees/Indemnities Executed guarantee/indemnity; Notice of Demand served on the guarantor; and Calculation of the amount outstanding under the guarantee. Judgment Debt Copy of the judgment; and Documents/details to support the underlying debt as per other categories. Deficiencies on Secured Debt Security Documents (eg. mortgage); Independent valuation of the secured portion of the debt (if not yet realised) or the basis of the creditor s estimated value of the security; Calculation of the deficiency on the security; and Details of income earned and expenses incurred by the secured creditor in respect of the secured asset since the date of appointment. Loans (Bank and Personal) Executed loan agreement; and Proof of Debt Guidance Notes_180613_IW 1

14 Loan statements showing payments made, interest accruing and the amount outstanding as at the date of appointment. Tax Debts Documentation that shows the assessment of debts, whether it is an actual debt or an estimate, and separate amounts for the primary debt and any penalties. Employee Debts Basis of calculation of the debt; Type of Claim (eg. wages, holiday pay, etc); Correspondence relating to the debt being claimed; and Contract of Employment (if any). Leases Copy of the lease; and Statement showing amounts outstanding under the lease, differentiating between amounts outstanding at the date of the appointment and any future monies. Proof of Debt Guidance Notes_180613_IW 2

15 PROXY FORM Tracy Village Social & Sports Club Incorporated (Administrators Appointed) ABN (Tracy Village) (the Association) APPOINTMENT OF PROXY I/We (if a firm, strike out I and set out the full name of the firm) of (insert address) a creditor of Tracy Village Social & Sports Club Incorporated (Administrators Appointed) appoint (insert name, address and description of the person appointed) or in his or her absence (insert name, address and description of the person appointed) as my/our (choose one): general proxy special proxy to vote at the meeting of creditors to be held on 5 July 2018 at 11:00 AM or at any adjournment of that meeting. Resolution (only complete where appointing a special proxy) For Against Abstain 1 Whether to appoint a committee of inspection 2 If so, who are the committee s members

16 DATED this day of 2018 Name Signature Select which of the below applies (choose one): The creditor is a company and I am signing as a director of the company The creditor is a company and I am signing as an authorised representative/duly constituted attorney of the company I am an individual and I am signing in my personal capacity (which includes employees) The creditor is a partnership and I am signing as a partner of the partnership I am signing in my personal capacity as a member or contributory of Tracy Village Social & Sport Club Incorporated (Administrators Appointed) Other: The creditor is a sole trader and I am signing as the proprietor Proxy forms should be completed and returned by no later than 5:00 PM on 4 July RETURN TO: Tracy Village Social & Sports Club Incorporated (Administrators Appointed) C/- McGrathNicol Address: GPO Box 9986, Brisbane QLD 4001, Australia Phone: Fax:

17 Proxy Guidance Notes Insert full name and address of creditor, contributory or member on the top line. On the second line, insert the address of the creditor, contributory or member. On the next line insert the name of the person you appoint as your proxy. You may insert the Chairperson of the meeting if you wish. You may appoint an alternate proxy on the fourth line who may act if your first appointed proxy cannot attend the meeting. You may insert the Chairperson of the meeting if you wish. Make sure you select whether the proxy is a general or special proxy. A general proxy is where you leave it to the proxy to decide how to vote on each of the resolutions put before the meeting. A special proxy is where you specify how the proxy is to vote on each resolution and the proxy must vote in accordance with that instruction. If the proxy is a special proxy, the form must include details of each resolution and whether the proxy holder is to cast their vote in favour or against each resolution or abstain from voting. Date and sign the Proxy form, indicating in which capacity you are signing the form. The person signing must be authorised to do so. 8 Proxy Guidance Notes_180613_IW 1

18 Tracy Village Social & Sports Club Incorporated (Administrators Appointed) ABN (Tracy Village) (the Association) General Information for Attending and Voting at Meetings of Creditors Time and Place of Meeting Pursuant to Insolvency Practice Rules (Corporations) (IPR) and section 72 of the Associations Act (NT) (Associations Act), a meeting of creditors must be convened at the time and place the Chairperson believes are convenient for the majority of creditors entitled to receive notice of the meeting. Quorum Pursuant to IPR and section 72 of the Associations Act, unless a quorum is present, a meeting must not act for any purpose other than: the election of a chairperson; and the proving of debts; and the adjournment of the meeting. A quorum is present if two (2) or more persons are entitled to vote and at least two (2) persons are present at the meeting in person, by proxy or by power of attorney. A quorum is present if only one (1) person is entitled to vote and that person is present at the meeting in person, by proxy or by power of attorney. A person who participates in the meeting using electronic facilities is taken to be present in person at the meeting. A meeting is sufficiently constituted if only one (1) person is present in person, if the person represents personally or by proxy or otherwise a number of persons sufficient to constitute a quorum. Chairperson Pursuant to IPR and section 72 of the Associations Act, the external administrator is appointed Chairperson of the meeting. Alternatively, pursuant to IPR 75-50, IPR and section 72 of the Associations Act, the external administrator may appoint someone else to act as chairperson of the meeting and authorise that person to use any proxies held by the external administrator on the external administrator s behalf. For the second meeting of creditors in a Voluntary Administration, the Administrator must chair the meeting pursuant to IPR and section 72 of the Associations Act. Voting Pursuant to IPR and section 72 of the Associations Act, creditors will not be eligible to vote at the meeting unless they have lodged particulars of their debt or claim prior to or at the meeting. Accordingly, creditors who intend to vote at the meeting should ensure that they lodge a formal proof of debt with the external administrator prior to or at the meeting. Pursuant to IPR and section 72 of the Associations Act, a resolution put to the meeting is to be decided on the voices or by a poll, if one is requested. A poll may be requested by: the chairperson; or a person participating and entitled to vote at the meeting. 1

19 Pursuant to IPR and section 72 of the Associations Act, should a poll be requested: a resolution is passed if a majority in number and a majority in value vote in favour of the resolution; and a resolution is not passed if a majority in number and a majority in value vote against the proposed resolution. In the event of a deadlock, the chairperson may exercise a casting vote. In such situations, the minutes of the meeting must specify the chairperson s reasons for exercising, or not exercising, their casting vote. Proxies Pursuant to IPR and section 72 of the Associations Act, a person entitled to vote at a meeting may, in writing, appoint an individual as their proxy to attend and vote at the meeting on their behalf. Accordingly, creditors who are unable to attend the meeting but who wish to be represented should ensure that a validly executed proxy form is lodged with the external administrator prior to the meeting. Corporate Creditors Corporate creditors who wish to attend the meeting should note that an individual may only represent them if the corporation validly grants that person a proxy or power of attorney. Alternatively, section 250D of the Corporations Act and section 72 of the Associations Act, provides that a corporation may, by resolution of its board, provide a standing authority for a specified person to represent the corporation at a specified meeting of creditors. A copy of any such resolution should be provided to the external administrator prior to attending the meeting. Committee of Inspection Pursuant to IPR 80-5 and section 72 of the Associations Act, a person may only serve as a member of a Committee of Inspection if the person is: a creditor of the company personally; or the attorney of a creditor under a general power of attorney; or authorised in writing by a creditor; or a representative of the Commonwealth if a FEG claim has been, or the Commonwealth considers a claim is likely to be, made in relation to unpaid employee entitlements. Corporate creditors who are members of a Committee of Inspection may be represented by an individual authorised in writing by the member to represent the member on the committee. 2

20 Information Sheet: Committees of Inspection You have been elected to be, or are considering standing for the role of, a member of a Committee of Inspection (COI) in either a liquidation, voluntary administration or deed of company arrangement of a company (collectively referred to as an external administration). This information sheet is to assist you with understanding your rights and responsibilities as a member of a COI. What What is is a a COI? COI? A COI is a small group of creditors elected to represent the interests of creditors in the external administration. The COI advises and assists the external administrator and also has the power to approve and request certain things this is discussed in more detail below. Membership of the COI is a voluntary, unpaid position. Who can be elected to a COI? To be eligible to be appointed as a member of a COI, a person must be: A creditor A person holding the power of attorney of a creditor A person authorised in writing by a creditor; or A representative of the Commonwealth where a claim for financial assistance has, or is likely to be, made in relation to unpaid employee entitlements. If a member of the COI is a company, it can be represented by an individual authorised in writing to act on that creditor s behalf. It also allows the creditor to maintain its representation if a change in the individual is required A COI usually has between 5 and 7 members, though it can have more, or less, depending on the size of the external administration. A member of a COI can be appointed by: resolution at a meeting of creditors an employee or a group of employees owed at least 50% of the entitlements owed to employees of the company a large creditor or group of creditors that are owed at least 10% of the value of the creditors claims, If an employee or group of employees, or a large creditor or group of creditors, appoints a member to the COI, they cannot vote on the general resolution of creditors to appoint members to the COI. Each of these groups also have the power to remove their appointed member of the COI and appoint someone else. ARITA ACN Level 5, 191 Clarence Street, Sydney NSW 2000 Australia GPO Box 4340, Sydney NSW 2001 t e admin@arita.com.au arita.com.au AUSTRALIAN RESTRUCTURING INSOLVENCY & TURNAROUND ASSOCIATION

21 If you are absent from 5 consecutive meetings of the COI without leave of the COI or you become an insolvent under administration, you are removed from the COI. What are the roles and powers of a COI? A COI has the following roles: to advise and assist the liquidator, voluntary administrator or deed administrator (collectively referred to as the external administrator) to give directions to the external administrator to monitor the conduct of the external administration. In respect of directions, the external administrator is only required to have regard to those directions. If there is a conflict between the directions of the COI and the creditors, the directions of the creditors prevail. If the external administrator chooses not to comply with the directions of the COI, the external administrator must document why. A COI also has the power to: approve remuneration of the external administrator after the external administrator has provided the COI with a Remuneration Approval Report (a detailed report setting out the remuneration for undertaking the external administration) approve the use of some of the external administrator s powers in a liquidation (compromise of debts over $100,000 and entering into contracts over 3 months) require the external administrator to convene a meeting of the company s creditors request information from the external administrator approve the destruction of the books and records of the external administration on the conclusion of the external administration with the approval of the external administrator, obtain specialist advice or assistance in relation to the conduct of the external administration apply to the Court for the Court to enquire into the external administration. An external administrator is not required to convene a meeting of creditors if the request by the COI is unreasonable, or provide requested information if the request is unreasonable, not relevant to the administration or would cause the external administrator to breach their duties. A request to convene a meeting of creditors is unreasonable if: it would substantially prejudice the interests of a creditor or third party there are insufficient funds in the external administration to cover the cost of the request a meeting of creditors dealing with the same matters has already been held or will be held within 15 business days, or the request is vexatious. If a request for a meeting is reasonable, the external administrator must hold a meeting of creditors as soon as reasonably practicable. Version: July INFO - COI INFORMATION SHEET V1_0.DOCX AUSTRALIAN RESTRUCTURING INSOLVENCY & TURNAROUND ASSOCIATION PAGE 2

22 A request for information is unreasonable if: it would substantially prejudice the interests of a creditor or third party the information would be subject to legal professional privilege disclosure of the information would be a breach of confidence there are insufficient funds in the external administration to cover the cost of the request the information has already been provided or is required to be provided within 20 business days, or the request is vexatious. If the request for information is not unreasonable, the external administrator must provide the requested information within 5 business days, but the law provides for further time in certain circumstances. An external administrator must inform the COI if their meeting or information request is not reasonable and the reason why. How does the COI exercise its powers? A COI exercises its powers by passing resolutions at meetings of the COI. To pass a resolution, a meeting must be convened and a majority of the members of the COI must be in attendance. A meeting is convened by the external administrator by giving notice of the meeting to the members of the COI. Meetings of the COI can be convened at short notice. The external administrator must keep minutes of the meeting and lodge them with ASIC within one month of the end of the meeting. ASIC is entitled to attend any meeting of a COI. What restrictions are there on COI members? A member of a COI must not directly or indirectly derive any profit or advantage from the external administration. This includes by purchasing assets of the company or by entering into a transaction with the company or a creditor of the company. This prohibition extends to related entities of the member of the COI and a large creditor(s) that appoints a member to the COI. Creditors, by resolution at a meeting of creditors, can resolve to allow the transaction. The member of the COI or the large creditor(s) that appoints a member to the COI is not allowed to vote on the resolution. Where Where can can you you get get more more information? information? The Australian Restructuring Insolvency and Turnaround Association (ARITA) provides information to assist creditors with understanding external administrations and insolvency. This information is available from ARITA s website at ASIC provides information sheets on a range of insolvency topics. These information sheets can be accessed on ASIC s website at (search insolvency information sheets ). Version: July INFO - COI INFORMATION SHEET V1_0.DOCX AUSTRALIAN RESTRUCTURING INSOLVENCY & TURNAROUND ASSOCIATION PAGE 3

23 Initial Remuneration Notice Tracy Village Social & Sports Club Incorporated (Administrators Appointed) ABN (Tracy Village) (the Association) The purpose of the Initial Remuneration Notice is to provide you with information about how we propose our remuneration for undertaking the Voluntary Administration will be set. Remuneration methods There are four basic methods that can be used to calculate the remuneration charged by an insolvency practitioner. They are: A. Time based/hourly rates: This is the most common method. The total fee charged is based on the hourly rate charged for each person who carried out the work, multiplied by the number of hours spent by each person on each of the tasks performed. B. Fixed Fee: The total fee charged is normally quoted at the commencement of the external administration and is the total cost for the external administration. C. Percentage: The total fee charged is based on a percentage of a particular variable, such as the gross proceeds of asset realisations. D. Contingency: The practitioners fee is structured to be contingent on a particular outcome being achieved. Method chosen Given the nature of these external administrations, we propose that our remuneration be calculated on a time basis which will be recorded and charged in six minute increments. Details of the hourly rates for different levels of staff are included below. The complexity and demands of the external administrations will determine the staff to be utilised for these appointment. We have chosen the time based method because: This method is considered to be most suitable for these appointments as it ensures creditors are only charged for work that is performed in the external administrations, which can be difficult to accurately estimate at the date of appointments. Even later than the date of appointment, it can be difficult to estimate the time that may be required in advance of the substantive work being undertaken. The time based method in this case again ensures that creditors are only charged for work that is actually performed in the external administrations. The practitioner is required to perform a number of tasks which do not relate to the realisation of assets, for example responding to creditor enquiries, reporting to ASIC and distributing funds in accordance with the provisions of the Corporations Act. The practitioner has a time recording system that can produce a detailed analysis of time spent on each type of task by each individual staff member utilised in the external administration. Time based remuneration calculates fees upon a basis of time spent at the level appropriate to the work performed. 1

24 Explanation of Hourly Rates The rates for our remuneration calculation are set out in the following table, together with a general guide showing the qualifications and experience of staff engaged in the external administrations and the role they take in the external administrations. The hourly rates charged encompass the total cost of providing professional services and should not be compared to an hourly wage. Title Appointee/Partner Director 1 Director Senior Manager Manager Assistant Manager Senior Accountant Accountant Description Registered liquidator, Chartered Accountant or equivalent and generally degree qualified with more than twelve years of experience. Leads assignments with full accountability for strategy and execution. Generally Chartered Accountant or comparable qualification and degree qualified with more than ten years of experience, including four years of Director or equivalent experience. Autonomously leads complex insolvency appointments reporting to Appointee/Partner. Generally Chartered Accountant or comparable relevant qualification and degree qualified with more than nine years of experience. Autonomously leads insolvency appointments reporting to Appointee/Partner. Generally Chartered Accountant or comparable relevant qualification and degree qualified with more than seven years of experience. Self-sufficiently conducts small to medium insolvency appointments and leads major workstreams in larger matters. Generally Chartered Accountant or comparable relevant qualification and degree qualified with more than five years of experience. Self-sufficiently conducts small insolvency appointments and takes a supervisory role on workstreams in larger matters. Generally Chartered Accountant or comparable relevant qualification and degree qualified with more than three years of experience. Autonomously manages workstream activity within appointments. Generally degree qualified and undertaking Chartered Accountant s qualification or comparable relevant qualification with more than 16 months of experience. Completes tasks within workstreams and appointments under supervision. Generally degree qualified and undertaking or about to undertake Chartered Accountant s qualification or comparable relevant qualification with less than one year of experience. Assists with tasks within workstreams and appointments under supervision. Hourly rate (excl GST) $517 $468 $450 $423 $360 $306 $288 $207 2

25 Title Undergraduate/Cadet Senior Treasury staff Senior Client Administration and Treasury Administration Description Undertaking relevant degree. Assists with tasks within workstreams and appointments under supervision. Appropriately experienced and undertakes senior Treasury activities such as oversight of the processing of payment of receipts and banking administration. May be responsible for day to day management of projects or operations and may have supervisory responsibility for junior staff. Appropriately experienced and undertakes senior level administrative support activities or Treasury activities. May be responsible for day to day management of projects or operations and may have supervisory responsibility for junior staff. Appropriately experienced and undertakes support activities such as meeting coordination and preparation of materials where it is efficient and appropriate to do so. Hourly rate (excl GST) $171 $468 $171 $171 McGrathNicol reviews its hourly rates on either 31 December or 30 June. Creditors will be advised of any change to the hourly rates for these external administrations. Estimated remuneration Subject to the assumptions set out below, we estimate that these external administrations may involve remuneration for the practitioners of approximately $260,000. The following variables may have a significant effect on this estimate: for trading administrations, the unpredictable level of work required to stabilise the business and take control of all staffing and operational matters; the time that may be required to obtain books, records, funds and assets (if any) from the parties that hold them; the number and value of claims that may be received in the external administrations and work that may be required to adjudicate on those claims for voting and/or dividend purposes; work that may be required to distribute funds to creditors; investigations that may be required to ascertain the existence and location of any other assets, including potential legal actions that may be available to the external administrators; where viable legal claims are identified, the timeframe to resolution becomes very significantly impacted by the conduct of the defendant and their willingness to resolve the claim by a negotiated settlement, as well as Court timeframes, both of which are difficult to predict; and any identified matters that are required to be reported to statutory authorities such as ASIC. 3

26 Disbursements Disbursements are divided into three types: Externally provided professional services these are recovered at cost. An example of an externally provided professional service disbursement is legal fees. Externally provided non-professional costs such as travel, accommodation, external printing services and search fees these are recovered at cost. Internal disbursements such as photocopying, printing and postage. These disbursements are generally charged at cost but may include, in the case of disbursements such as data storage and hosting, telephone calls, photocopying and printing, both direct variable and fixed costs. For example the rate per page for printing includes a reasonable and commercial allowance for paper, toner, depreciation, power and maintenance. We are not required to seek creditor approval for disbursements paid to third parties, but must account to creditors. However, we must be satisfied that these disbursements are appropriate, justified and reasonable. We are required to obtain creditor s consent for the payment of internal disbursements where there may be a profit or advantage. Creditors will be asked to approve our internal disbursements where there is a profit or advantage prior to these disbursements being paid from the external administrations. Details of the basis of recovering disbursements in these external administrations are provided below. For clarity, it is noted that any time costs of any employee of McGrathNicol or any associated entity will be reported as part of our remuneration, for which approval may be sought. Basis of disbursement claim Disbursement type Externally provided professional services Externally provided non-professional services Rate (Excl GST) At cost At cost Internal disbursements Advertising Courier Data hosting data loading & processing fee Data hosting monthly hosting fee (for matters where data is required to be hosted online for more than 1 month) At cost At cost $50-$100 per gigabyte (GB)* Standard monthly hosting fee of $2,000 per month (for up to 500GB of information loaded) plus $2,000 per 4

27 month for every additional 500GB block over and above 500GB Printing black and white Printing Colour Postage Stationery and other incidental disbursements Staff per diem travel allowance** Staff vehicle use Telephony mobile, fixed line and conference calls $0.09 per page $0.28 per page At cost At cost $89.00 per day*** $0.63 per km*** At cost * Depending on volume of data to be hosted ** Payable when partners or staff are required for business purposes to stay away from their usual place of residence overnight *** These rates are deemed reasonable by the Australian Taxation Office Further explanation of data hosting disbursements In the conduct of these external administrations, we may use McGrathNicol Technology Advisory to extract, aggregate, electronically process and/or host electronic data, which could be used for the: trade or sale of the business or assets; and/or investigations regarding transactions or potential recoveries available to creditors. If data hosting is required and we choose not to use the services of McGrathNicol Technology Advisory, we will otherwise have to purchase those services from an alternative provider and/or use another method to achieve the same end, which will not be as efficient as using these available internal services. We note that the data hosting rates above are no more than our standard commercial pricing available for the same services when they are provided to external parties. Dated: 27 June